'A friendly budget of trying to balance the short-term and long-term priorities of government in a tough economic environment.' Our Minister of Finance, Mr Enoch Godongwana, delivered his budget speech for the 2023 / 2024 fiscal year on Wednesday, 22 February 2023, in the National Assembly. Eskom and loadshedding woes took centre stage in a budget where tax rates are set to remain largely the same (other than for inflationary related adjustments to personal income tax tables and excise taxes).
Detailed below are some of the highlights from the 2023 National Budget Speech.
Economic outlook and budget framework:
Tax revenue collections for 2022/23 are expected to total R1.69 trillion. This exceeds the 2022 Budget estimate by R93.7 billion. The improvement in revenue collection is due to higher collection in corporate and personal income taxes as well as customs duties. This partially offsets the lower value-added tax estimates.
Real GDP growth of 1.4 percent is projected from 2023 - 2025 compared with 1.6 per cent estimated in October.
Mainly due to the Eskom debt relief, government debt will stabilise at a higher level of 73.6 per cent of GDP and in 2025/26. This is three years later than anticipated in the 2022 Medium Term Budget Policy Statement.
The consolidated fiscal deficit is projected at 4.2 per cent of GDP for 2022/23, and will reach 3.2 per cent in 2025/26.
Debt-service costs are projected to average R366.8 billion annually over the medium term, reaching R397.1 billion in 2025/26.